According To to the latest data available from the Reserve Bank, which is from May this year, there are 21.5 million credit cards operational in India. The total credit outstanding is Rs.32,400 crore. The average comes to about Rs.15,000 per card. That doesn’t sound like much, but there’s a catch in this data. The average outstanding is per card, not per person. There certainly aren’t 21.5 million distinct individuals in India who have credit cards because anecdotally, one knows that a lot of people who have credit cards have more than one, often more than two.

It’s also clear anecdotally that excessive credit card usage is a widespread problem, especially among young people who have started earning recently. Of course, excessive borrowing is hardly a personal issue alone. From individuals to companies to governments, excessive borrowing, interest costs and the fear of how this will ever come under control seems to be the primary source of problems in the world economy. Even the most debt-ridden twenty-something is probably a model of financial conservatism compared to some businesses and practically all governments. Of course, governments can often tax and inflate their way out of debt, something that the individual with a huge credit card bill cannot.

What makes it worse for most is that they have no clear idea of how much they are paying for this debt. I see youngsters with credit card debt that is costing them 30 or 40% per annum trying to return to financial health by putting small sums of money in bank fixed deposits. That’s because the actual annualised rate of interest in a credit card is a number that is always obfuscated by every bank. It’s a remarkable regulatory and consumer protection failure that while every single rate is stated as an annual number, credit card rate is stated as a monthly figure in some obscure place. On most monthly card statements, it is not stated at all.